BCG Matrix on Nestle Name Matrix Number Lee Yean Yeon GM 05291 Loh Chee Kheong GM 05299 Chin Fui Yien GM 05287
Dec 09, 2014
BCG Matrix on Nestle
Name Matrix Number
Lee Yean Yeon GM 05291
Loh Chee Kheong GM 05299
Chin Fui Yien GM 05287
Table of Content
Nestle Malaysia an Overview
Vision and Mission of Nestle
Categories of the products
BCG Matrix/ Growth Share Matrix
Products on BCG Dimension
Conclusion
Nestle Malaysia an OverviewStrength and Advantages of Nestle
Produce over 300 halal products in categories • Coffee and beverages, prepared foods, milk, liquid drinks, breakfast cereals, chilled dairy, ice-
cream, chocolate and confectionery
Brand names under Nestle• Maggi, Nespray, Kit Kat, Nestiva, Nestum, Bliss, Nutren, Cerelac, Power Bar & etc.
Milk
Produce over 300 halal products in categories
Dairy
Milk
Beverage
Nestle Professional
Food Business
Confectionary
Nestle Liquid DrinkNestle Ice-cream
Healthcare Nutrition
Chilled DairyMaternal & Infant Nutrition
Vision and Mission of Nestle
VisionGood Food Good Life
PositionAs a global, trusted and responsible food, nutrition, health and wellness company to be more proactive in providing healthy solutions and value
– added products to meet the needs of consumers
Categories of the products
BCG Matrix/ Growth Share Matrix
BCG Matrix was developed based on a company’s business units/product can be classified into four categories based on combinations or market growth and market share relative to the largest competitor.
BCG Matrix
Cash Cow
• As leader in a mature market, cash cow exhibit a return on assets that is greater than the market growth rate, and thus generate more cash than they consume.
• What do you think about the ‘Cash Cow’ for Nestle?
Bus
ines
s G
row
th R
ate
Low
High
Market Share Rate (Relative Position)High Low
• Maggi Noodle (Food)• Introduced in 1969• Market share is still growing
• Milo (Beverage)• Introduced in 1950• Sponsor 200 sport events in one year
Brand name has been embedded into customer’s heart
Star
• Stars generate large amounts of cash because of their strong relative market share, but also consume large amounts of cash because of their high growth rate.
• What do you think about the ‘Star’ For Nestle?
Bus
ines
s G
row
th R
ate
Low
High
Market Share Rate (Relative Position)High Low
• Nescafe • Launched in 1964• High in research and development (R&D)
cost• The coffee market is still growing,
increasing number of coffee shops in the country
Question mark/ Problem Child
• It grow rapidly and thus consume large amount of cash, but as they have low market share, they do not generate much cash. As a result, it is a large net cash consumption.
• What do you think about the ‘Question Mark’ For Nestle?
Bus
ines
s G
row
th R
ate
Low
High
Market Share Rate (Relative Position)High Low
• Chocolate (Confectionery)• Introduced in 1995• It remained strong brand leader in the
market.• Rise of competitors and start lose the
grip in the market.
Dog
• It has low market share and a low growth rate and thus it neither generate nor consume a large of cash.
• Dogs are cash traps because of the money tied up in a business that has little potential.
• What do you think about the ‘Dog’ For Nestle?
Bus
ines
s G
row
th R
ate
Low
High
Market Share Rate (Relative Position)High Low
• Mineral water (Beverage)
• Sterile Milk bear brand (liquid drink)• Launched in 2013• The concept of packaging is not
welcomed
Weak in market, difficult to make profit
Overall BCG Matrix
Bus
ines
s G
row
th R
ate
Low
High
Market Share Rate (Relative Position)High Low
Conclusion
• BCG framework is needed to assume whether the product has an increment in relative market share as well as to increase in the cash generation.
• It is a simple tool to view a corporation’s portfolio at a glance and resource allocation among strategic business units.
• Example, the position of a business on the growth-share matric provides an indication of its cash generation and its cash consumption.